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Georgy Egorov joined the Kellogg faculty in 2009 after receiving his PhD in Economics from Harvard University. His research interests include political economy and economic theory. He is currently working on questions related to weak institutions and their dynamics, interaction between market and non-market actors in business environments, and social image considerations in strategic decisions. Professor Egorov's papers have been published in leading journals, including Econometrica, American Economic Review, Journal of Political Economy, American Political Science Review, Review of Economic Studies, and the Quarterly Journal of Economics.

Bursztyn, Leonardo, Georgy Egorov and Robert Jensen. Forthcoming. Cool to Be Smart or Smart to Be Cool: Understanding Peer Pressure in Education. Review of Economic Studies.

We model and test two school-based peer cultures: one that stigmatizes effort and one that rewards ability. The model shows that either may reduce participation in educational activities when peers can observe participation and performance. We design a field experiment that allows us to test for, and differentiate between, these two concerns. We find that peer pressure reduces takeup of an SAT prep package virtually identically across two very different high school settings. However, the effects arise from very distinct mechanisms: a desire to hide effort in one setting and a desire to hide low ability in the other.

Public regulation is increasingly facing competition from "private politics" in the form of activism and corporate self-regulation. However, its effectiveness, welfare consequences, and interaction with public regulation are poorly understood. This paper presents a unified dynamic framework for studying the interaction between public regulation, self-regulation, and boycotts. We show that the possibility of self-regulation saves on administrative costs, but also leads to delays. Without an active regulator, firms self-regulate to preempt or end a boycott and private politics is beneficial for activists but harmful for firms. With an active regulator, in contrast, firms self-regulate to preempt public regulation and private politics is harmful for activists but beneficial for firms. Our analysis generates a rich set of testable predictions that are consistent with the rise of private politics over time and the fact that there is more self-regulation and activism in the US, while public regulation continues to be more common in Europe.

An influential thesis often associated with de Tocqueville views social mobility as a bulwark of democracy: when members of a social group expect to join the ranks of other social groups in the near future, they should have less reason to exclude these other groups from the political process. In this paper, we investigate this hypothesis using a dynamic model of political economy. As well as formalizing this argument, our model demonstrates its limits, elucidating a robust theoretical force making democracy less stable in societies with high social mobility: when the median voter expects to move up (respectively down), she would prefer to give less voice to poorer (respectively richer) social groups. Our theoretical analysis shows that in the presence of social mobility, the political preferences of an individual depend on the potentially conflicting preferences of her "future selves," and that the evolution of institutions is determined through the implicit interaction between occupants of the same social niche at different points in time.

It is often argued that additional constraints on redistribution such as granting veto power to more players in society better protects property from expropriation. We use a model of multilateral bargaining to demonstrate that this intuition may be flawed. Increasing the number of veto players or raising the supermajority requirement for redistribution may reduce protection on the equilibrium path. The reason is the existence of two distinct mechanisms of property protection. One is formal constraints that allow individuals or groups to block any redistribution that is not in their favor. The other occurs in equilibrium where players without such powers protect each other from redistribution. Players without formal veto power anticipate that the expropriation of other similar players will ultimately hurt them and thus combine their influence to prevent redistributions. In a stable allocation, the society exhibits a "class" structure with class members having equal wealth and strategically protecting each other from redistribution.

In many contracting settings, actions costly to one party but with no direct benefits to the other (money-burning) may be part of the explicit or implicit contract. A leading example is bureaucratic procedures in an employer-employee relationship. We study a model of delegation with an informed agent, where the principal may impose money-burning on the agent as a function of the agent's choice of action, and show that money-burning may be part of the optimal contract. This result holds even if action-contingent monetary transfers are possible, as long as transfers from the principal to the agent are bounded from below (as in limited liability or minimal wage requirements). In fact, the optimal contract can involve a combination of both efficient monetary incentives and inefficient nonmonetary incentives through money burning. Our model delivers some results novel to the delegation literature. First, money-burning is more likely if the principal is more "sensitive" to the choice of action than the agent. This is consistent with the perception that there is more bureaucratization in large organizations. Second, money-burning is more likely if the agent's limited liability constraint is tighter relative to his participation constraint. This implies that a higher minimum wage distorts employment contracts towards using socially wasteful nonmonetary incentives, leading to a Pareto inferior outcome as the agent is still held down to his reservation value through increased money burning

Voters commonly face a choice between competent candidates and those with policy preferences similar to their own. This paper explores how electoral rules, such as district magnitude, mediate this trade-off and affect the composition of representative bodies and policy outcomes. We show formally that anticipation of bargaining over policy causes voters in elections with multiple single-member districts to prefer candidates with polarized policy positions over more competent candidates. Results from a unique field experiment in Afghanistan are consistent with these predictions. Specifically, representatives elected in elections with a single multi-member district are better educated and exhibit less extreme policy preferences.

Acemoglu, Daron, Georgy Egorov and Konstantin Sonin. 2015. Political Economy in a Changing World. Journal of Political Economy. 123(5): 1038-1086.

We provide a general framework for the analysis of the dynamics of institutional change (e.g., democratization, extension of political rights, or repression of different groups), and how these dynamics interact with (anticipated and unanticipated) changes in the distribution of political power and in economic structure. We focus on Markov Voting Equilibria, which require that economic and political changes should take place if there exists a subset of players with the power to implement such changes and who will obtain higher expected discounted utility by doing so. Assuming that economic and political institutions as well as individual types can be ordered, and preferences and the distribution of political power satisfy natural "single crossing" (increasing differences) conditions, we prove the existence of a pure-strategy equilibrium, provide conditions for its uniqueness, and present a number of comparative static results that apply at this level of generality. We then use this framework to study the dynamics of political rights and repression in the presence of radical groups that can stochastically grab power and the dynamics of collective experimentation over institutions.

When voters fear that politicians may be influenced or corrupted by the rich elite, signals of integrity are valuable. As a consequence, an honest politician seeking reelection chooses `populist' policies---i.e., policies to the left of the median voter---as a way of signaling that he is not beholden to the interests of the right. Politicians that are influenced by right-wing special interests respond by choosing moderate, or even left-of-center policies. This populist bias of policy is greater when the value of remaining in office is higher for the politician; when there is greater polarization between the policy preferences of the median voter and right-wing special interests; when politicians are perceived as more likely to be corrupt; when there is an intermediate amount of noise in the information that voters receive; when politicians are more forward-looking; and when there is greater uncertainty about the type of the incumbent. We also show that `soft term limits' may exacerbate, rather than reduce, the populist bias of policies.

The possibility of treason by a close associate has been a nightmare of most autocrats throughout history. More competent viziers are better able to discriminate among potential plotters, and this makes them more risky subordinates for the ruler. To avoid this, rulers, especially those which are weak and vulnerable, sacrifice the competence of their agents, hiring mediocre but loyal subordinates. Furthermore, any use of incentive schemes by a personalistic dictator is limited by the fact that all punishments are conditional on the dictator's own survival. We endogenize loyalty and competence in a principal-agent game between a dictator and his viziers in both static and dynamic settings. The dynamic model allows us to focus on the succession problem that insecure dictators face.

Every dictator dislikes free media. Yet, many non-democratic countries have partially free or almost free media. In this paper, we develop a theory of media freedom in dictatorships and provide systematic statistical evidence in support of this theory. In our model, free media allow a dictator to provide incentives to bureaucrats and therefore to improve the quality of government. The importance of this benefit varies with the natural-resource endowment. In resource-rich countries, bureaucratic incentives are less important for the dictator; hence, media freedom is less likely to emerge. Using panel data, we show that controlling for country fixed effects, media are less free in oil-rich economies, with the effect especially pronounced in non-democratic regimes. These results are robust to model specification and the inclusion of various controls, including economic development, democracy, country size, size of government, and others.

We study the formation of a ruling coalition in nondemocratic societies where institutions do not enable political commitments. Each individual is endowed with a level of political power. The ruling coalition consists of a subset of the individuals in the society and decides the distribution of resources. A ruling coalition needs to contain enough powerful members to win against any alternative coalition that may challenge it and it needs to be self-enforcing, in the sense that none of its subcoalitions should be able to secede and become the new ruling coalition. We present both an axiomatic approach that captures these notions and determines a (generically) unique ruling coalition and the analysis of a dynamic game of coalition formation that encompasses these ideas. We establish that the subgame perfect equilibria of the coalition formation game coincide with the set of ruling coalitions resulting from the axiomatic approach. A key insight of our analysis is that a coalition is made self-enforcing by the failure of its winning subcoalitions to be self-enforcing. This is most simply illustrated by the following example: with majority rule, two-person coalitions are generically not self-enforcing and consequently, three-person coalitions are self-enforcing (unless one player is disproportionately powerful). We also characterize the structure of ruling coalitions. For example, we determine the conditions under which ruling coalitions are robust to small changes in the distribution of power and when they are fragile. We also show that when the distribution of power across individuals is relatively equal and there is majoritarian voting, only certain sizes of coalitions (e.g., with majority rule, coalitions of size 3, 7, 15, 31, etc.) can be the ruling coalition.

Working Papers

Egorov, Georgy, Leonardo Bursztyn and Stefano Fiorin. 2017. From Extreme to Mainstream: How Social Norms Unravel.

Social norms, usually persistent, can unravel quickly when new public information arrives, such as a surprising election outcome. In our model of strategic communication, senders state their opinion but they can lie to pander to the popular view; receivers thus make less inference about such senders. We test the model's predictions with two experiments. On the sender's side, we show via revealed preference that Donald Trump's rise in popularity and eventual victory increased individuals' willingness to publicly express xenophobic views. On the receiver's side, we show that individuals are judged less negatively if they expressed a xenophobic view in an environment where the view is popular.

A receiver wants to learn multidimensional information from a sender, but she has capacity to verify only one dimension. The sender's payoff depends on the belief he induces, via an exogenously given monotone function. We show that by using a randomized verification strategy, the receiver can learn the sender's information fully if the exogenous payoff function is submodular. If it is (strictly) supermodular, then full learning is not possible. In a variant of the model that allows for severe punishments when the sender is found to have lied, we can give a complete characterization of when full learning is possible. Our full learning result does not critically rely on perfect verifiability of one dimension: in an example with noisy verification, the receiver's ex-post perceived distribution of information converges in distribution to the true value as the noise vanishes.

Full-Time / Evening & Weekend MBA

Microeconomic Analysis (MECN-430-0) 1Ys: This course is either waived during the admissions process or completed during the Summer term.
Among the topics this core course addresses are economic analysis and optimal decisions, consumer choice and the demand for products, production functions and cost curves, market structures and strategic interactions, and pricing and non-price concepts. Cases and problems are used to understand economic tools and their potential for solving real-world problems.

Political Economy III: Social Choice and Voting Models (MECS-540-3) This course is about collective decision-making, both on the micro level (how people aggregate information or preferences through voting) and on the big picture level (how societies choose institutions to live under). We first overview some classical results from social choice, and find limitations of the cooperative approach. We then look at models of strategic behavior in collective decision-making, voting over binary agendas, and models of legislative bargaining. The next big topic is elections, where we plan to talk about all aspects – decisions whether and how to vote, whether to run, and how to campaign. The last big topic is institutions. We will talk about revolutions and coup d’états, how countries democratize, when and why. Ultimately, we will study models of forward-looking behavior in collective decision-making and dynamics of institutions.

Research in Economics (MECS-560-3) This course introduces first-year PhD students to the economics research environment. With an emphasis on breadth, and minimal prerequisite knowledge at the graduate level, students are exposed to the process of forming and answering research questions. To implement this goal, the course typically involves a handful of instructors each giving their own perspective on successful approaches to research by highlighting significant recent works in their respective fields of interest.